Getting Started with a Warehouse Management System (WMS) [Part IV of IV]

Concluding this series of articles… We addressed the critical importance of planning a WMS deployment from the outset. We then covered the basic hardware components and their associated costs. Finally, there is the issue of software.

Like planning, this one’s too big to try to cover in a simple blog post. The idea, again, is simply to get you thinking…

WMS solutions are all over the map. We’ve sold a couple different ‘name’ brands over the years (before developing our own). Our experience has been that the better systems are loaded with functionality – usually way more than what most small to mid-size businesses need. Nonetheless, they’ve matured over the years to the point where they contain most of the functionality you will conceivably need – and probably a lot more. And unfortunately, they are priced accordingly.

And note also that this does not necessarily mean that all their functionality will automatically link back to your accounting system. That’s a separate discussion. Generally, if your ERP software offers a WMS solution, that’s your obvious first choice. If the functionality comes reasonably close to your needs, and you find acceptable integration points between ERP or accounting and WMS, explore that course first. Your reseller or provider will give you guidance in this area.

The best systems we’ve worked with tend to require an extensive amount of very careful configuration and ‘switch setting’ during the initial stages of employment. You need to get the basic functionality down cold before even attempting to address special needs or modifications.

Start slowly, with just a sub-section of products or orders. Just try one or two test runs and carefully trace the transactions from start to finish to ensure that postings and reporting are properly accomplished. Don’t be afraid to spend a month or two in ‘beta’ as you work out the bugs, wrinkles and your unique requirements.

Realistically, in the SMB (small to midsize business) marketplace where we earn our living (companies generally in the $5 to $100 Million revenue range), our experience has been that a fully deployed WMS system, including hardware and software, is a six figure investment, easily. Add in planning and all the deployment and training services (which we haven’t even talked about) to ‘go live,’ and you’re talking a $200K investment probably. This investment can often be spread over several months, but remember, it’s not the investment that matters, it’s the return on that investment.

Now for that money, we’re talking about a system that will manage the warehouse of maybe 50,000 to 100,000 square feet, for a company that processing dozens to a few hundred orders a day. It includes planning, hardware, software, training and basic implementation. Having said that, you can spend, literally, millions of dollars on WMS, and there is no one size fits all solution. The figures we’re providing are based on our own experiences in the SMB market in the Midwest for a typical (whatever that means) manufacturer or distributor.

In other words: your mileage may vary. But these are clean, honest numbers that will give you a good start. We’ve done these systems for less than our quoted numbers above, too, mind you. It all depends on what WMS ultimately means to you.

Our experience has been that WMS pays for itself within about two years, sometimes less. Usually, you will go from loving your provider, to hating them, to loving them again during the deployment process. Everyone has to remain patient, and everyone has to recognize: we are all on the same team here. Choose an experienced provider and treat them as you would be treated – ensuring they do the same – and you will eventually succeed.

Then, you’ll become a case study testimonial to the labor savings, improved accuracy, faster shipping, better responsiveness and overall improved warehouse performance that motivated you to step up to WMS in the first place!

One Response

warehouse management system is not new, time has proven and tested the advantage of using this system. It has greatly help in increasing customer service withoug incurring any additional cost. With the aggregation of ERP the results gave a higher returns on business. The collaboration of both WMS and ERP created a far better result in production thus surprisingly resulted in higher sales.